Cashless Payments

Significant advances in the fintech industry frequently introduce innovative new technology for payment methods, allowing consumers and businesses several cashless payment methods to consider.

While cash payments are still in use, we are moving closer to becoming a cashless society than ever before. With so many payment options available, small and medium-sized businesses are able to implement a variety of payment methods—offering secure and convenient solutions to their customers.

This post is dedicated to explaining cashless payments: what they are, the pros and cons, and how to implement them.

What are Cashless Payments?

Plainly stated, cashless payments include any mode of payment outside of paper or coin currency. While this does include payment methods such as the paper check and money orders, for the purposes of this post, we’ll spend most of our time discussing the most common and technology-centric cashless payment options.

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Cashless vs. Contactless Payments—What Is the Difference?

While sometimes used incorrectly and interchangeably, cashless transactions differ from contactless payments.

Contactless payments are defined as any transaction that is processed in a way that removes the physical interaction between the purchaser and the merchant. Examples include eCommerce and transactions processed with near-field communication (NFC), or radio frequency identification (RFID) technology—more on that later.

Essentially, all contactless payments are cashless, but not all cashless payments are contactless.

What Are the Different Types of Cashless Payments?

The list of cashless payment options continues to grow as new technology is created and consumer demand increases. Below are some of the most popular cashless payment options available.

Credit and debit cards

Unless you’re a truly cash-only business, accepting debit and credit cards is a standard for any sized business. This is the most frequently used and widely accepted cashless payment option available.

While credit cards have been in use for decades, another trend has emerged related to card payments: contactless credit and debit cards. Tap-to-pay is widely available and many newly issued cards are enabled with this technology.

One note of consideration is that while many businesses already accept credit and debit cards, the payment terminal needs to be enabled with contactless payment technology—meaning it may be time to upgrade hardware, or even your payment processor if you don’t currently support contactless pay.


For some businesses, accepting ACH payments can result in lower processing fees than credit cards and is a great option for recurring payments. This cashless payment option is completed through the Automated Clearing House network and processed by transmitting bank routing and account information between the payor and business.

This payment method is already widely in use, as this is the same system that 93% of Americans use to receive employer direct deposits. While not necessarily appropriate for a small retail business, this payment method makes a lot of sense in other sectors such as legal, healthcare, and more.


Paper checks, while antiquated, are still widely used and a cashless payment option. There are a number of downsides to accepting paper checks, including increased risk to the business and delayed processing time.

Mobile wallets

Mobile wallets have gained popularity in recent years, even more so since the pandemic caused a surge in demand for contactless options. Also referred to as digital wallets, this payment method connects the user’s credit and debit cards to an e-wallet which can be used for eCommerce or near-field communication transactions (using the same technology as tap-to-pay). Another feature of making a mobile payment is the security—payments made through mobile wallets are two-way encrypted, making this a secure and convenient payment option.


As the cryptocurrency market continues to grow, there is a lot of information to keep track of. Crypto payments have increased significantly in recent years, with some payment apps like PayPal integrating cryptocurrency trading and payments into their app. Additionally, crypto payments are accepted at some major corporations such as Expedia and Microsoft. While this may not be ideal for small-to-medium-sized businesses, if the market consolidates and stabilizes, this could be one to keep an eye on.

Payment apps

Payment apps, like Venmo, Cash App, PayPal and Zelle are another convenient way to accept payment, both online and in person. While many of these payment apps began as a way to conduct peer-to-peer payments, some businesses are able to easily implement some of these options into the point of sale.

A prime example is a rise in popularity of Apple Pay, Google Pay, Amazon Pay and PayPal to check out in many eCommerce transactions.

Buy now, pay later

Buy now, pay later (BNPL) is a cashless payment option that allows customers to spread out their payments into installments without a credit check. Popular apps include Afterpay and PayPal.

Depending on the BNPL provider, there are varying terms for purchase, but this is an excellent cashless option to increase the bottom line—in fact, a recent McKinsey survey found that 29% of BNPL users would have made a smaller purchase, or not at all, if this was not offered.

Pros and Cons of Cashless Payment Systems

Any business owner looking to evaluate payment options needs to consider the pros and cons of which cashless payment options to offer to their customers. Below is a list of some of the pros and cons to consider.

Pro: cashless payments can increase revenue

Businesses with limited payment options or those that only accept cash transactions are almost certainly leaving money on the table. Because cashless and digital payments dominate the payments industry and are preferred by many customers, making options available can increase sales.

Pro: cashless transactions can shed valuable insight

One advantage of cashless transactions is the data provided, allowing businesses to make more informed decisions. Unlike cash, digital and electronic can shed light on a wealth of information. You can link cashless transactions to customers or customer groups as well as analyze payment volume by time period or payment type.

Payment analytics solutions, like those provided by Stax, help businesses stay on top of trends, keep close tabs on essential metrics, and make data-backed decisions.

Pro: increased efficiency during checkout

Some of the more popular cashless payment options are incredibly simple and fast to process. Consumers today seek out convenient and safe ways to make their purchases, and offering several options not only makes a customer more likely to purchase, it’s often faster than traditional payment methods.

Con: some businesses may struggle with the technological learning curve

Not every business or customer base is going to quickly adapt to cashless options. While the basics of debit and credit cards are commonly known, newer forms of payment like mobile wallets or payment apps may not be as easily adopted. With any new technology, there is a learning curve for both the business and the customer.

Con: businesses cannot accept cashless payments if there is an outage

While businesses can implement a variety of cashless options, if there is a system outage, cash is the only failsafe option. If a business chooses to go completely cashless, internet failures or technology issues mean there is no way to safely accept payment during an outage.

Con: cash is the only payment method that doesn’t charge fees

Any non-cash transaction comes with fees, so deciding to be fully or partially cashless means there will be fees associated with payment processing. However, these fees depend heavily on your payment processor and the costs should be carefully reviewed. Sometimes these fees can be mitigated—for example, credit card surcharging is one way to offset the costs of card processing.

Ready to Implement Cashless Payments?

Any size business—whether operating primarily as eCommerce, hybrid or primarily brick-and-mortar—needs a payment processor that is reliable and meets the demands of the business.

To implement cashless payments in your business, the first step is to choose a processor that is payment card industry (PCI) compliant and able to meet the hardware and software needs of your business. Stax can help your business accept a variety of contactless and cashless payment options.

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